News blog

AIM 50 Digest 22 July 2022

BY: Andrew Hore |
POSTED: 24/07/2022 |

Abcam (ABC) has decided to drop its AIM quotation and focus on the Nasdaq listing. The proposal will be put to shareholders later this year. Revenues are estimated to have reached £185m in the first half, which is a 19% increase. Gross margins are improving as previous investment in operating efficiency starts to pay off.
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Fevertree Drinks (FEVR) was already one of the worst performing large AIM companies this year before the latest trading statement. The mixer drinks supplier says first half sales were 14% higher at £160.9m and full year revenues are still expected to be £355m-£365m. However, margins are under pressure from higher freight and glass costs. Glass is 30% of cost and its price has doubled. This means EBITDA guidance has been slashed from £63m-£66m to £37.5m-£45m. Chief executive and co-founder Tim Warrilow has bought 115,000 shares at 870.887p each. In September 2020, he exercised options and made a profit of £3.46m selling the shares at 2019p each. In the previous five years he sold £34.3m worth of shares – the majority at 1925p a share.
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Airline and tour operator Jet2 (JET2) more than trebled revenues in the year to March 2022, albeit from a low point, but the loss from continuing operations also increased from £369.9m to £388.8m. Seat capacity increased from 2 million to 7.1 million and average load factor edged up from 66% to 69.2%. The company’s own cash is £1.08bn. The prospects for this year depend on the aviation sector returning to a level of stability, as well as future bookings.
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Floorcoverings and tiles manufacturer Victoria (VCP) benefited from its acquisitive strategy, but it also generated organic growth last year. All parts of the business generated like-for-like growth, including the new US distribution business. That growth is continuing in the first quarter of the new year. Net debt was £406.6m at the end of March 2022, but cash generated from operations will help to finance further acquisitions.
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LBG Media (LBG) says that trading is at least in line with expectations of 2022 revenues of £65.5m and pre-tax profit of £18m. First half content views are 40% ahead of the same time last year. Net cash was £28.5m at the end of June 2022. US operations are being established.
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Internet names wholesaler and online marketing provider CentralNic (CNC) says first half revenues were $335m – pro forma organic growth is 62% - and adjusted EBITDA $38m. Zeus has edged up its 2022 pre-tax profit forecast from $54.2m to $57.2m. That assumes lower second half revenues than in the first half so leaves room for further upgrades if momentum is maintained. The online marketing activities are gaining market share.
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Oil and gas producer Kistos (KIST) has made a bid approach to the much bigger North Sea oil and gas producer Serica Energy (SQZ). The plan would be to move to the Main Market and join the FTSE 250 index. Kistos is offering 0.2932 of one of its shares and 246p in cash – 67p distributed by Serica Energy from its cash pile and 179p paid by Kistos. There was an alternative offer from Serica of 90p a share in cash plus 1.29 Serica Energy shares. Both offers have been rejected.
So far this year, average net production has been 26,832 boe/day with gas more than 85% of production. Serica hedged 25% of gas production in the first half and this falls to 20% in the second half. Full year production should be between 26,000 and 30,000 boe/day.
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MP Evans (MPE) is likely to report a 50% increase in interim plantation profit to around $65m. That is thanks to much higher palm oil and palm kernel prices. Crop volumes were flat with the company’s own crop offsetting a lower contribution from independents. The previous investment in planting oil palms should increase crop volumes later in the year. The latest changes to Indonesian taxes and levies should be positive for MP Evans. There is potential for further growth in the dividend.
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Assets under management of Polar Capital (POLR) fell from £22.1bn to £19bn in the three months to June 2022, although fund closures accounted for £459m of the drop. In contrast, Brooks Macdonald (BRK) had small net inflows, but performance meant that funds under management declined from £16.7bn to £15.7bn.
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Central Asia Metals (CAML) increased copper and lead production, although zinc production was lower, in the first half of 2022. Prices have fallen but there is potential for recovery.
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Pan African Resources (PAF) produced 2% more gold in the year to June 2022. There were 205,459 ounces of gold produced, which was higher than the guidance of 195,000 ounces, and this level should be maintained in 2022-23. Cash generation reduced net debt from $33.7m to $9.6m.
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Audio visual equipment distributor Midwich Group (MIDW) managed to maintain its margin in the first half of 2022. Interims will be published on 6 September. Organic growth was 27%. Pre-tax profit should improve from £13m to more than £19m. The momentum is continuing in the second half and the full year should be slightly better than expected.
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Alliance Pharma (APH) increased interim revenues by 1% to £81.6m but gross margin was lower. Core brands and prescription medicines generated flat revenues. There was growth in the other consumer brands. Chinese sales of Nizoral fell and Amberen revenues were lower. The interims will be published on 20 September.
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FW Thorpe (TFW) non-exec director Antony Cooper’s related parties Jamie Cooper and Emma Cooper each purchased 520 shares at 376.5p each.
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CVS Group (CVSG) has appointed Peel Hunt as nominated adviser and joint broker with Berenberg.

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